The issue of subsidies in the state budget now requires a serious economic review, particularly amid regional developments that are driving up energy prices, shipping and insurance costs, and disrupting supply chains. As uncertainty persists, public finances face additional burdens that constrain the government’s ability to manage spending and achieve economic reform objectives.
اضافة اعلان
According to the Ministry of Energy, the cost of subsidising petroleum products and covering price differences reached approximately JD 255 million from the beginning of the crisis through the end of September. This resulted from not passing on the full increase in global prices to domestic consumers. Although the temporary price freeze is covered by the budget and helps cushion the shock for citizens and productive sectors, decisions that appear popular in the short term may become deferred financial burdens that the economy eventually pays for, either through a wider deficit or reduced spending on development priorities.
Figures in the 2026 Budget Law reveal the growing scale of these commitments. Allocations for the main subsidy, assistance and transfer programmes amount to approximately JD 1.03 billion, compared with JD 916 million in 2025 an increase of JD 114 million, or around 12.4%. These allocations cover commodity subsidies, cash assistance, health, education and municipalities. Each programme must therefore be assessed according to its objectives and impact, rather than treating all of them as general price subsidies.
For commodity subsidies specifically, JD 171 million has been allocated for wheat and animal feed, while JD 80 million is designated for gas cylinders. Meanwhile, the National Aid Fund’s cash assistance allocation stands at JD 280 million. These figures highlight the importance of distinguishing between subsidies linked to purchasing and consuming a particular commodity and assistance intended to address a household’s needs and financial capacity. Protecting effective social programmes while reviewing benefits that are not linked to actual need should therefore form the basis of any reform.
It has consequently become necessary to reopen this issue seriously and redirect subsidies to those who need them through a fair, gradual mechanism that prioritises lower-income households and takes account of their ability to bear costs and their actual needs. The assessment should also consider how rising transport and production costs affect the prices of goods and services, so that compensation is not limited to the direct consumption of fuel.
This requires building on the existing unified national registry and updating the data associated with it. The National Aid Fund already uses a targeting system based on 57 indicators to assess households’ living standards and needs, and distributes assistance through electronic channels. This provides an opportunity to improve the system’s effectiveness by reviewing eligibility criteria, ensuring that households affected by economic shocks are included, and making it easier to submit appeals and correct data.
However, the success of this step will also depend on how it is implemented. Citizens must not feel that receiving assistance to which they are entitled requires long waits, complicated procedures or any compromise to their dignity. This calls for smooth and transparent processes that ensure cash assistance reaches eligible recipients directly, at amounts that take into account the additional burdens resulting from price adjustments. Regular reviews should reflect changes in prices and incomes, compensation should be provided before prices are adjusted, and support channels should be available to those unable to use electronic services.
The priority today is to protect financial stability and prevent additional burdens from accumulating on the Treasury without sacrificing social protection or undermining growth. This requires disclosing the cost of each programme, identifying its beneficiaries and the savings expected from reform, and explaining how those savings will be redirected towards protection, services and investment. The success of reform should be measured by its net impact on both the Treasury and household living standards.
Redirecting subsidies reinforces the state’s social responsibility while giving it greater capacity to fulfil that responsibility. Subsidies that reach people who do not need them drain resources, whereas fairly targeted assistance protects citizens, strengthens trust between them and the government, and gives the economy greater room to withstand future shocks.
